Our annual survey reveals that while the tech salaries have held steady, some IT staffers are looking to switch jobs in an improving economy.
By Phil Albinus

Good economic news might be uplifting music to the
ears of CEOs and the bean-counting CFOs, but it might be
the blues for CIOs who want to retain their staff next
year. According to the respondents of our annual Waters
salary survey, financial IT salaries overall remain
roughly the same as last year, but the improving market
might set off a round of job-hopping. The documents in
your firms printer tray might be the résumés of the
mid-tier technology director or information manager you
once counted as your most loyal employee.

In our Waters annual salary survey, we asked our
financial technology readers to tell us where they work,
how much theyre earning in base salary and bonuses and
whether or not they are thinking about looking for
greener pastures. This years salary results closely
resemble last years--salaries and bonuses have remained
steady if limp compared to the go-go 90s and in keeping
with Wall Streets sober economic outlook--but a sizable
proportion of readers are looking for work either inside
or outside of their current places of employment.

Money, Money, Money

Lets start with the money. The plurality of
respondents answered that they were earning between
$100,000 and $124,999 annually. According to the
spokespeople from the IT recruitment firms we spoke
with, these figures mark our respondents as middle
managers and mid-tier technology information workers.
The second-largest group reported that they earned
$75,000 to $99,999 per year. The grass on the other side
of the conference table, to mix metaphors, was much
greener, as we expected. Of the CIOs and CTOs who
responded to our survey, approximately 40 percent said
that their base salary was between $150,000 and
$199,999. Nearly thirty percent of CIOs and CTOs
responding said their pay was a notch lower at $125,000
to $149,999, while 21 percent said they took home
$200,000 to $300,000. One respondent reported earnings
from $300,000 to $400,000 per annum.

These numbers dont surprise the IT headhunters who
place CIOs in their corner offices for a living.
According to Judy Homer, president of JB Homer Associates,
the CIO or CTO for a medium-sized investment firm can
still easily make anywhere from $150,000 to $300,000
annually, plus bonuses. "It depends on cash versus
equity because there are far fewer stock options these
days," she says. "I think people are taking a look at
packages that are better suited to them. The days of
making huge demands are gone."

Bonuses are still strong, thanks to what appears to
be the slow and steady uptick in the stock market.
Nearly one fifth of the CIOs who answered our survey
responded that they expect to receive a bonus of
$150,000 to $199,999 this year. Likewise, close to 15
percent expected to receive a bonus ranging from $50,000
to $74,999; and the same amount expected to see a bonus
check in the amount of $75,000 to $99,999 at the end of
this year. On the high end, another 15 percent expects a
bonus between $300,000 and $399,999. One respondent
expects to see a bonus of anywhere between $400,000 and
$499,999.

But the bonuses may have a down side. Although any
financial perks remain impressive for an industry still
feeling the effects of the terror attacks of Sept. 11,
2001; the collapse of companies like Enron, WorldCom and Global
Crossing; the burst Internet bubble; and the
assorted high finance scandals, the bonuses could mark
the start of a new round of job hopping.

"Im already hearing about people who are setting up
their [job switching] for January and February," says
Homer. "Once they get their bonuses, theyll be hitting
the ground running."

Although Homer says she doesnt have hard numbers to
back up her projections, she has grim news for any CIO
or CTO who expects to see the same faces at next years
Christmas party. "I am predicting a mass exodus of
anywhere from ten to fifteen percent and maybe even
twenty-five percent," she says. "People who used to be
terrified to be on the phone at work are now calling
me."

Kristin Wait, a headhunter with Spencer Stuart
in Manhattan agrees. Although she says that the mindset
of the last two years still encourages people to feel
grateful that they have a job, if the economy revives
strongly, people will feel that they can safely move on.
"People may have been in a job that they didnt like and
they may be looking for their next challenge and next
opportunity. As soon as those opportunities arise, they
will take a s at them," says Wait.

"The financial aspect is a relatively small portion
of employee satisfaction from where I sit," says J.P.
Rangaswami, global CIO for Dresdner Kleinwort
Wasserstein (DrKW), who oversees roughly 1,000
staffers. "Its the freedom, the involvement and the
fact that they get a feedback loop from their peer group
that drives people today." Rangaswami acknowledges that
theres been quite a bit of attrition, but he attributes
it to the folks who entered the industry at the peak of
the boom. "Thats only because theyve been priced out
of the market," he says.

Looking to Leave?

Our survey appears to back that up that notion. Of
the CIOs and CTOs who responded, half said that they are
staying put, while slightly less than half overall said
the same thing. Those loyal responses aside, they also
said they are willing to entertain offers and many said
they are actively looking for a new title. Of the CIOs,
64 percent responded that they are happy with their
current job but would "entertain offers," while 61
percent of our overall survey said the same thing. Of
our responding CIOs, 14 percent said they are either in
contact with a headhunter or actively sending out
résumés--or both. Only one CIO said not to bother
calling with a job offer, he or she was staying put.

Investment banks dont appear to be totally in denial
that staff retention will be a real issue in the coming
year. Says Homer, "I think they are letting go on one
end and are hiring quietly on the other end. Banks that
are taking a serious look at retention are saying that
they are worried. Theyre taking a solid look at this
because they dont want to lose their A
players."

The Impact of Outsourcing

One continuing challenge facing the prospective job
hunter is the lack of new financial IT jobs compared to
the number of résumés floating around Wall Street and
beyond. One major reason for this, of course, is
outsourcing, which usually climbs up from the lower
ranks and stops well before the CIOs doorstep. "Most of
the outsourced jobs at the senior level are those that
help with the transition over to the outsourcer," says
Wait. "What happens a year or two after that becomes the
question mark. Do they remain on the outsourcers
payroll? The reality is these outsourcers cant augment
these jobs with their own people so they have to utilize
the staff from their clients."

In other words, she adds, "The former bank employees
become IBM employees.
They did so at JPMorgan Chase,
and I think theyre doing it at Merrill," Wait
says.

Hire and Hire

With the good economic news comes some cautiously
optimistic news at best. The headhunters we spoke with
foresee some IT hiring in the coming years even after
the past staff reductions and outsourcing initiatives.

"People are hiring for Q1 of next year. Ive seen a
little bit more interest in senior-level opportunities
in the retail, the asset management and brokerage side
of the business," says Wait. Wait said she and colleague
tried to determine the last major CIO move in the past
year or so. "When did the last major CIO position
change? I can recall only a few. Other than that,
theres been very little movement in the past a two to
three years." She did acknowledge that Nick Themelis
exit from and Nancy Gloors entrance count as
significant moves.

This doesnt surprise veteran headhunters who often
fill the top tech position at major investment firms.
One career path is to avoid being outsourced or
commoditized, say the experts. "Programming has become a
commodity. As soon as what you do for a living is
commoditized, you risk being eliminated," says Homer.

Retention Deficit Disorder

One area in which managers may have a tough time in
2004 is employee retention. Wall Street has not
instilled much good will or loyalty in its employees
after rounds of severe layoffs, budget cuts and
outsourcing to countries where mid-tier technical
staffers saw their jobs done by someone who earns the
equivalent of a Starbucks baristas salary.

"I think the days of the salary bargains where we can
get someone on the cheap are over. The fear here is
retention. The people who have accepted positions in the
last two years at a lower salary than they were earning
in the past are now seriously thinking about taking a
different, higher paying position," says Homer. "Theres
no real loyalty because they feel that theyve been
burned."

That said, one CIO from a major Wall Street firm who
wished to remain anonymous said he doesnt foresee a
mass exodus of his staff. "I havent seen very many
people leaving and starting the farm in Vermont or
traveling in New Zealand for six months the way they
used to," chuckles the CIO. "I worry, though, about the
psychology. I dont know if theyre getting burned out
to the farms of Vermont, but there has been a general
bit of goodwill burnt because peoples expectations were
set on a different track during the Internet bubble.
That creates a certain wear and tear on how people feel
about where they work. The odds are that we will
navigate through that okay, but its definitely a point
of concern."